Scarcity

My Chronicle column this week looks at the issue of scarcity, as it applies to time, food and poverty.

Passionate About Poverty, The Chronicle, 29 October 2013

Consider three scenarios.

A busy academic misses deadlines on projects she had promised to complete months earlier. One day, she promises herself that she won’t commit to another project until the backlog is finished. The next day, she gets an offer to contribute a paper to a conference, and accepts on the spot.

A man is struggling to lose weight. He plans a low-fat diet, then joins some friends for dinner at a pub. Everyone else orders chips with their meal, so he joins them. At the end of the night, he figures the diet is ruined, so he might as well stop off at the petrol station for an ice cream.

A couple in poverty are trying to pay off their bills. They know what they should be doing: minimise expenses, pay off the high-interest loans first, and slowly get the finances under control. One month, they decide to get a payday loan to give them some breathing room. But soon the loan starts to snowball, and the debt load is bigger than ever.

In Scarcity: Why Having Too Little Means So Much, Sendhil Mullainathan and Eldar Shafir make the point that time management, food management, and money management all share a common theme: when we’re facing scarcity, we sometimes make bad decisions. Drawing on a smorgasbord of research, they show that scarcity can lead us to place too much emphasis on pleasure now, even if it leads to regret tomorrow.

The solution, Mullainathan and Shafir argue, is to build a bit of ‘slack’ into our lives. They describe a hospital that was operating at full capacity, where emergency cases would throw the system into chaos – delaying scheduled procedures for hours. The solution, it turned out, was to leave one operating theatre empty, except for emergencies. This meant that emergency cases didn’t ripple through the system, and ended up increasing the number of patients treated by the hospital.

Among the problems that Scarcity explores, poverty is the one I’m most passionate about. I had it in my head when I spoke at an anti-poverty week forum organised by Kippax Uniting Church and chaired by Lin Hatfield-Dodds. Alongside the formal speakers (Andrew Barr, Richard Denniss and myself), we heard first-hand from West Belconnen residents Kyla McLean, Sienna Chalmers, Michelle Mayer and Glenn Thomson. Their stories about transport challenges, housing stress and school bullying reminded me of how complex poverty is.

As Mullainathan and Shafir point out, the difference between poverty and other problems of scarcity is that while you can take a day off from a busy job or a diet, you can’t take a day off from poverty. The answers to reducing poverty in Canberra aren’t easy, but we need to recognise that this can be a hard place to be poor. We need to tackle the challenges – such as icy winters and high house prices – with creative solutions. Because all of us are diminished by poverty in our shared community.

Andrew Leigh is the federal member for Fraser, and his website is www.andrewleigh.com.